For Many New York Impresarios, Y2K Festivities Have Been a Bust / High prices and concern about crowds keeping people away

New York Times

Published 4:00 am, Tuesday, December 28, 1999

1999-12-28 04:00:00 PDT New York -- When the clock strikes midnight Friday, the throngs in Times Square will be welcoming in a new year at what is expected to be the biggest New Year's Eve party in the square's 95-year history.

But not everyone in New York will be in a festive mood, especially those who banked on the changeover to the Year 2000 to usher in big profits as well as big crowds. For them, the giant ball descending from atop 1 Times Square will more than likely symbolize fallen expectations.

There was a general assumption that big millennium celebrations would translate into people's clamoring to attend. But as it turns out, many people have opted to stay home because of Y2K fears and worry about travel and crowds. And unexpected resistance to high prices has caused party cancellations, restaurants closing for the night of the 31st and much lower rates on hotel rooms.

The same pattern of resistance is true in other cities from Washington to Minneapolis-St. Paul to Los Angeles. Cruise ships also managed to fill their millennium cruises only by scaling back their inflated prices.

But for many Americans, New York is still the city most synonymous with New Year's Eve partying and revelry, so cancellation of the Celebration 2000 party scheduled for the Jacob Javits Convention Center on New Year's Eve was particularly embarrassing.

With Andrea Bocelli, Sting, Aretha Franklin and Tom Jones among the scheduled performers, the tickets, priced at $1,000 to $2,500, were presented as a bargain in a city where tickets to Broadway shows cost upward of $75. Although Celebration 2000 eventually scaled down plans and prices, the public stayed away, and the event was scrapped.

Many other big-name events still have space available. These include the dinner party with Champagne and dancing to three different orchestras at the Waldorf-Astoria ($1,500 a person); the Metropolitan Opera performance of Act II of "Die Fledermaus" followed by dinner and dancing on the tiers of the Opera House ($1,500 to $2,500); World Yacht dinner cruises with open bar and live music ($550 to $999); dinner and dancing at the Rainbow Room ($3,000); a Madison Square Garden concert with Billy Joel, followed by dinner and drinks ($153 to $1,002); Windows on the World ($300 in the bar, $2,000 with dinner in the dining room), and Samplings restaurant, on the second floor of the Crowne Plaza in Times Square (where $550 accords guests a six-course dinner meal with Champagne and a close-up view of the crowd and the ball drop).

Some of those prices have been lowered from original levels, and some hotels that had planned to sell millennium packages have abandoned the idea.

Yet most city hotels will be full or close to it, because occupancy is always high over New Year's, and because New York has only about 65,000 hotel rooms, compared with about 120,000 in Las Vegas and 94,000 in Orlando, Fla. Moreover, even on a normal day -- and New York is anything but normal on New Year's Eve -- the city's hotels are the costliest in the United States. At an average $178.60 a day this year, according to Smith Travel Research, rates are more than $40 higher than in San Francisco, the next most expensive.

To increase occupancy, many New York hotels lowered room rates and dropped the four-night requirement to three or even two nights.

For example, $695 rooms at the Waldorf-Astoria -- that's for one day -- sold for $389 through Hotel Reservations Network, a consolidator that still has rooms available in 12 New York hotels (although the Waldorf is full). Rooms from $550 at the Hilton at 53rd Street and Avenue of the Americas sold for $179, while two weeks ago the Central Park Inter-Continental New York listed its rooms for the holiday with Priceline.com, discounting its posted $389 daily rate to $250.

The Michelangelo, at 51st Street and Seventh Avenue, considered setting its four-night millennium packages at between $4,000 and $8,000, but eventually made them $1,800 to $2,700 for three nights. And three hotels that offered to rent their building and hotel staff over New Year's Eve did not receive any takers.

The 627-room Millennium Broadway in Times Square was asking $3 million rental from December 31 through January 2, but now has two-night packages beginning at $550 a night. The 155-room Fitzpatrick Grand Central Hotel at 44th between Lexington and Third avenues was asking $1.5 million rental, while the 92-room Fitzpatrick Manhattan at Lexington and 57th Street was available for $1 million. When neither found takers, they put together packages for $1,999 total per room with a four-night minimum stay, or $400 a night per room with a two-night minimum stay. All three hotels still have packages available.

This price cutting is little different from the yield management widely practiced by airlines and cruise ships, which raise or lower fares according to demand. Or from sales on clothing or other slow-moving items in shops or department stores. What is different is the refusal of many people, even during flush economic times, to pay sky-high prices.

Yet there are still bargains to be had in New York, including the light show, fireworks and other free entertainment in Times Square on Friday and into the new year. It will cost $7 for a bird's eye view of the waning hours of the old year in 2000 from atop the Empire State Building, which will open at 9:30 a.m. on Friday and remain open until 7 p.m.

And there is the city itself, the one that never sleeps. Especially over New Year's.